What do savers and pensioners say on climate change?


Three events have dominated my news this week

  1. The impact of Coronavirus on people, events and financial markets
  2. The ruling against Heathrow’s third runway
  3. interventions by the DWP to ensure schemes measure and mange their carbon footprint.

The arguments are linked by  common factors. They are all about how global issues impact us locally. I find it helpful to think and  write about them together.  This puts them in a wider context.

The test of all the Government positions on health, travel and pension funds should be the popular support they enjoy. The contention of this article is that strong interventions on matters of global importance are supported by the general public.

When Government decisively intervenes on behalf of the public, those who manage public institutions like the NHS, Heathrow and our pension schemes – should listen.

Why is the DWP pushing so hard on climate change?

Put at its simplest, the DWP want pension funds to work harder to reduce the carbon footprint of their schemes and their regulator says “not at the expense of the ability of those schemes to deliver results”.

In a DC context, tPR appear to be concerned that adopting a responsible approach to investment might reduced member outcomes, compromise the trustee’s objectives and even leave regulator and trustee exposed to legal challenge.

In a DB context, the impact of trustee activism might lead to a weakening of employer covenants from the likes of  Shell, Centrica and BP which could lead to their schemes going into the PPF.

Infact it could be argued that any kind of intervention by trustees could have perverse consequences for the schemes they govern and the members they protect.

Against this, DWP are arguing (along with Mark Carney and “big government”) that the climate change issue is now a crisis of such proportions as to make the local arguments of the PLSA and the Pensions Regulator unimportant.

How local is trumped by global

Putting this in the context of Coronavirus is helpful. It is necessary that Governments take steps to contain and ultimately reduce the spread of the disease that mean that people’s freedoms are reduced, events don’t happen and productivity is impaired to the point that trillions are wiped off the value of the global economy.

It is helpful to think of the ruling against the third runway as the triumph of fundamental principles underlying the Paris Accord over the convenience of having easier air travel. There will be casualties from this ruling and it may also lead to a short term reduction in productivity.

But there is an acceptance amongst the British population that we do need Government intervention over the Coronavirus and I have heard very little objection to the Heathrow ruling. In both cases, we are prepared to put global considerations before local protectionism. It is important to note that for all its protectionism , the US has not been able to protect its markets from the global impact of what is increasingly looking like a pandemic.

Putting climate change at the top of the agenda

Yesterday I wrote that the Pension Regulator’s response to the UKSIF report was inadequate. I suspect that it will be seen as a sign of  “inaction” within the DWP and I speculate that the Pensions Minister will now be on a collision course with private and public funded pension schemes in Edinburgh on Thursday 12th March. I will be there to see how the arguments play out.

In the meantime, I am sorry to see Amanda Latham leaving the Pensions Regulator (to join Barnett Waddingham). She has been one of a very small number of women at the tPR who has led on the need to put climate change at the top of tPR’s and the trustee’s agenda.

Reducing the impact of climate change is clearly nowhere near top of tPR’s agenda. The UKSIF report, it is unequivocal.

“Pension scheme trustees’ policies on ESG factors like climate change are vague and non-committal, and many have not even published their policies – despite their legal obligation to do so”.

Whether the trustees are governing money for DB or DC pensions, the issues are the same. Is the money being managed for the good of the climate as well as the good of the members.

I think of this from the point of view of ordinary people who are not objecting to having to prescribe their freedoms to contain Coronavirus, seem to be supportive of the decision not to build a third runway on climate change grounds and have repeatedly said that if they have to see smaller less secure pensions to protect the planet’s future, they will pay that price.

The PLSA are launching an innovative consultation

Screenshot 2020-02-29 at 06.07.25

I will be interested to see what is “innovative” about it. I hope that it will innovate by asking the members of the schemes within the PLSA’s membership, what they think.  I don’t think is should rely solely on the views of trustees and employers.

My suspicion is that ordinary people are out of kilter with their trustees and are more progressive than the executives of many of the organisations they work for. I am not just talking about the activists but the rank and file of people who dispose of rubbish responsibly, buy and eat responsibly, don’t drive when they can walk and who believe in doing their bit.

They seem to be putting climate change at the top of their agenda and they are the people who matter most in this debate.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in age wage, DWP, ESG, pensions and tagged , , , , . Bookmark the permalink.

6 Responses to What do savers and pensioners say on climate change?

  1. Pingback: Putting two fingers up to DWP may end badly for TPR. | AgeWage: Making your money work as hard as you do

  2. Mike Post says:

    Hi Henry
    It is not climate change, which is a predominantly natural phenomenon, that is the problem but the the hubristic stupidity of politicians for passing the ill-considered Climate Change Act and, for example, for attempting to ban the use of fossil fuels which is crassly stupid dangerous self-harm to our economy. Do any of our politicians have any idea how central fossil fuels are to every material benefit we have today, not just travel and economically heating our homes? Wind won’t make iPads, steel or pharmaceuticals.
    It is how our trustees manage our money in a completely irrational investment world that is the problem, not climate change.
    A world on fire? Not!
    Mike Post (pensioner and former trustee)

    • henry tapper says:

      I put petrol in my car and my house is lit by electricity made by burning coal, I do agree Mike that we still need fossil fuels. But when i walked to the shops just now I passed a van with the driver asleep with his engine turned on. I know he wants to stay warm in his cab but there are better ways of doing it!

      • Mike Post says:

        Hi Henry
        Surely the objection to an idling ICE is the unwanted emissions of noxious gases such as nitrogen oxides and carbon monoxide, not carbon dioxide which is a generally beneficial gas?
        Since we have just received the sad news of the passing of that great physicist Freeman Dyson, may I trespass on your website to re-publish a piece by Freeman Dyson from 2015?
        Kind regards
        Mike Post

        Freeman Dyson: Scientific Dogmatism Still Alive

        Foreword to Indur Goklany’s GWPF report Carbon Dioxide: The Good News

        Indur Goklany has done a careful job, collecting and documenting the evidence that carbon dioxide in the atmosphere does far more good than harm. To any unprejudiced person reading this account, the facts should be obvious: that the non-climatic effects of carbon dioxide as a sustainer of wildlife and crop plants are enormously beneficial, that the possibly harmful climatic effects of carbon dioxide have been greatly exaggerated, and that the benefits clearly outweigh the possible damage.

        I consider myself an unprejudiced person and to me these facts are obvious. But the same facts are not obvious to the majority of scientists and politicians who consider carbon dioxide to be evil and dangerous. The people who are supposed to be experts and who claim to understand the science are precisely the people who are blind to the evidence. Those of my scientific colleagues who believe the prevailing dogma about carbon dioxide will not find Goklany’s evidence convincing. I hope that a few of them will make the effort to examine the evidence in detail and see how it contradicts the prevailing dogma, but I know that the majority will remain blind. That is to me the central mystery of climate science. It is not a scientific mystery but a human mystery. How does it happen that a whole generation of scientific experts is blind to obvious facts? In this foreword I offer a tentative solution of the mystery.

        There are many examples in the history of science of irrational beliefs promoted by famous thinkers and adopted by loyal disciples. Sometimes, as in the use of bleeding as a treatment for various diseases, irrational belief did harm to a large number of human victims. George Washington was one of the victims. Other irrational beliefs, such as the phlogiston theory of burning or the Aristotelian cosmology of circular celestial motions, only did harm by delaying the careful examination of nature. In all these cases, we see a community of people happily united in a false belief that brought leaders and followers together. Anyone who questioned the prevailing belief would upset the peace of the community.

        Real advances in science require a different cultural tradition, with individuals who invent new tools to explore nature and are not afraid to question authority. Science driven by rebels and heretics searching for truth has made great progress in the last three centuries. But the new culture of scientific scepticism is a recent growth and has not yet penetrated deeply into our thinking. The old culture of group loyalty and dogmatic belief is still alive under the surface, guiding the thoughts of scientists as well as the opinions of ordinary citizens.

        To understand human behavior, I look at human evolution. About a hundred thousand years ago, our species invented a new kind of evolution. In addition to biological evolution based on genetic changes, we began a cultural evolution based on social and intellectual changes. Biological evolution did not stop, but cultural evolution was much faster and quickly became dominant. Social customs and beliefs change and spread much more rapidly than genes.

        Cultural evolution was enabled by spoken languages and tribal loyalties. Tribe competed with tribe and culture with culture. The cultures that prevailed were those that promoted tribal cohesion. Humans were always social animals, and culture made us even more social. We evolved to feel at home in a group that thinks alike. It was more important for a group of humans to be united than to be right. It was always dangerous and usually undesirable to question authority. When authority was seriously threatened, heretics were burned at the stake.

        I am suggesting that the thinking of politicians and scientists about controversial issues today is still tribal. Science and politics are not essentially different from other aspects of human culture. Science and politics are products of cultural evolution. Thinking about scientific questions is still presented to the public as a competitive sport with winners and losers. For players of the sport with public reputations to defend, it is more important to belong to a winning team than to examine the evidence. Cultural evolution was centered for a hundred thousand years on tales told by elders to children sitting around the cave fire. That cave-fire evolution gave us brains that are wonderfully sensitive to fable and fantasy, but insensitive to facts and figures. To enable a tribe to prevail in the harsh world of predators and prey, it was helpful to have brains with strong emotional bonding to shared songs and stories. It was not helpful to have brains questioning whether the stories were true. Our scientists and politicians of the modern age evolved recently from the cave-children. They still, as Charles Darwin remarked about human beings in general, bear the indelible stamp of their lowly origin.

        In the year 1978, the United States Department of Energy drew up a ‘Comprehensive Plan for Carbon Dioxide Effects Research and Assessment’, which fixed the agenda of official discussions of carbon dioxide for the next 37 years. I wrote in a memorandum protesting against the plan:

        The direct effects of carbon dioxide increase on plant growth and interspecific competition receive little attention. The plan is drawn up as if climatic change were the only serious effect of carbon dioxide on human activities. . .In a comparison of the non-climatic with the climatic effects of carbon dioxide, the nonclimatic effects may be:

        1. more certain,

        2. more immediate,
        3. easier to observe,
        4. potentially at least as serious.

        … Our research plan should address these issues directly, not as a mere side-line to climatic studies.

        My protest received no attention and the Comprehensive Plan prevailed. As a result, the public perception of carbon dioxide has been dominated by the computer climate-model experts who designed the plan. The tribal group-thinking of that group of experts was amplified and reinforced by a supportive political bureaucracy.

        Indur Goklany has assembled a massive collection of evidence to demonstrate two facts. First, the non-climatic effects of carbon dioxide are dominant over the climatic effects and are overwhelmingly beneficial. Second, the climatic effects observed in the real world are much less damaging than the effects predicted by the climate models, and have also been frequently beneficial. I am hoping that the scientists and politicians who have been blindly demonizing carbon dioxide for 37 years will one day open their eyes and look at the evidence. Goklany and I do not claim to be infallible. Like the climate-model experts, we have also evolved recently from the culture of the cave-children. Like them, we have inherited our own set of prejudices and blindnesses. Truth emerges when different groups of explorers listen to each other’s stories and correct each other’s mistakes.

        Princeton – September 2015

        Freeman Dyson FRS, a world-renowned theoretical physicist, was Professor Emeritus of Mathematical Physics and Astrophysics at the Institute of Advanced Study in Princeton where he held a chair for many years. Dyson was the author of numerous widely read science books. He was a founding member of the GWPF’s Academic Advisory Council.

  3. Derek Scott says:

    I agree with Mike.

    Derek (pensioner and still a trustee)

  4. It is important to remember there are three initials: E-S-G, all interlinked to varying degrees. It used to be called socially responsible investment. Which implies a central ethos which requires some fundamental rethinking of our responsibilities, ethics and the way we live our lives.

    Dont get me wrong, there is no justification for being complacent – there are some serious fundamental issues. And it’s not just about the big issues, the dominance of the Thunberg effect, but about a whole hosts of smaller scale, local issues. Take the recent flooding – poor town planning/planing decisions/too much influence of property developers, lack of joined up thinking about land and water management etc etc. Or transport and the way we live our daily lives – big out of town malls that need transport versus small local facilities? Separating manufacturing or business parks and residential areas so everyone has to commute but no realistic, cohesive transport policy, with fragmentation across road and rail etc ? No coherent, uniform waste disposal and recycling policy because Govt devolved it to hard pressed local authorities without the commensurate funding to ensure consistency? Objecting to the Primark type lower price, overseas production as being “wasteful” but ignoring the benefits to local incomes. Or the other argument, wanting cheaper products, the best price, and not bothering about the conditions under which products are made?

    To package all this and the oversight as some kind of investment or regulatory “product” or to imply that any Government, civil service or quasi governmental body can issue directives, codes or whatever and suddenly the tanker turns faster … really? One term that comes to mind is “green washing” and for once I have some sympathy with tPR.

    Let’s pick the real battles to fight, adopt a supportive (not a puritanical) frame of mind and not use the easy target of pension schemes and trustees like some kind of whipping boy: the vast majority are probably doing the best they can against a fragmented and contradictory backdrop whilst also “getting on the their day job”. If the DWP and tPR disagree – for goodness sake, talk to each other, agree an approach and then come and discuss with us some proper joined up thinking – earn your salaries – and tell your Ministers that the next election is not your frame of reference! ‘Cos it certainly isn’t ours.

Leave a Reply